Ultra Mega Power Projects in India

Ultra Mega Power Projects (UMPP) are a series of ambitious power projects planned by the Government of India. With India being a country of chronic power deficits, the Government of India has planned to provide 'power for all'. This would entail the creation of an additional capacity of at least 100,000 MW by 2012. The Ultra Mega Power projects, each with a capacity of 4000 megawatts or above, are being developed with the aim of bridging this gap.

The UMPPs are seen as an expansion of the MPP (Mega Power Projects) projects that the Government of India undertook in the 1990s, but met with limited success. The Ministry of Power, in association with the Central Electricity Authority and Power Finance Corporation Ltd., has launched an initiative for the development of coal-based UMPP's in India. These projects will be awarded to developers on the basis of competitive bidding.

List of proposed UMPPs
As of Nov 2010, 16 UMPPs have been planned in Karnataka, Chattisgarh, Madhya Pradesh, Andhra Pradesh (2), Maharashtra (2), Orissa (3) , Tamil Nadu (2), Gujarat (2) and Jharkhand

Of these, the ones planned in Chattisgarh, Madhya Pradesh, Orissa and Jharkhand will come up at pithead locations (near coal mines) and use domestic fuel, while the rest will come up in coastal locations with easy access to imported coal. On the request of the state governments of Andhra Pradesh and Orissa, two more sites have been identified, which consist of a pithead site in Ib-Valley coalfield in Orissa and a coastal site at Krishnapatnam in Andhra Pradesh. The contract for Mundra UMPP has been given to Tata Power while Sasan, Tilaiyya and Krishnapatnam contracts have been awarded to Reliance Power Limited, a part of Reliance Anil Dhirubhai Ambani Group.

Operational costs
The project is being developed with the intention of providing power to consumers at minimum cost. Because of the huge size of these power plants, the cost of the electricity would be lower due to the economies of scale. The plants are estimated to cost roughly Rs. 15,000 crores each to set up. The cost of generation per unit is estimated at under Rs. 2.00.

Special purpose vehicles
Special purpose vehicles, or shell companies, have been set up as wholly owned subsidiaries of the Power Finance Corporation Ltd. (PFC) in each of the above states to build, own, and operate ("BOO" in economic parlance) these plants. The proposed shell companies are as follows:


 * Sasan Power Limited (Sasan, Madhya Pradesh)
 * Coastal Gujarat Power Limited (Mundra, Gujarat)
 * Coastal Karnataka Power Limited (Tadri, Karnataka)
 * Coastal Andhra Power Limited (Krishnapatnam, A.P.)
 * Coastal Tamil Nadu Power Limited (Cheyyur, T.N.)
 * Coastal Maharashtra Power Limited (Girye, Maharastra)
 * Orissa Integrated Power Limited (Sundergarh district, Orissa)
 * Jharkhand Integrated Power Limited (Tilaiya, Jharkhand)
 * Akaltara Power Limited (Aklatara, Chattisgarh)

May 2011: MASS protests Mundra Ultra Mega
In May 2011, a group known as Machimar Adhikar Sangharsh Sangathan (MASS) filed a collective protest against the Mundra Ultra Mega Power Project, saying there are high risks to the project without proper mitigation and accountability measures. The protest is targeted against the International Finance Corporation’s (IFC), the World Bank’s private sector lending arm, whose financing of high-risk coal plants in India faces community resistance. Its Compliance Advisor Ombudsman (CAO) has accepted a complaint against the Plant in Mundra, Gujarat. CAO is the independent body of IFC that handles disputes and compliance issues with its investments.

MASS says the plant is located in the special economic zone (SEZ) that cuts across fishing grounds, habitat of diverse marine lives and wide expanse of farm land, and that the project’s social impact assessment is significantly flawed, as fishing communities were excluded from the list of those directly impacted and IFC green lighted the loan without a cumulative impact assessment.

With a total project cost of US$ 4.14 billion, the IFC is investing a $450 million loan and $50 million in equity. Other financial institutions funding the project are the Export-Import Bank of Korea, Asian Development Bank, India Infrastructure Finance Co. Ltd., Housing and Urban Development Corporation Ltd., Oriental Bank of Commerce, Vijaya Bank, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Travancore, the State Bank of Indore and other local banks.

The MASS complaint came two months after villagers in Odisha state formally challenged IFC’s funding for the GMR Kamalanga Energy Limited.

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